Bad Faith Contracting

Dominick Vivona has a home in a wooded area near Greenwich, Connecticut. In June of 2017, he set out to build a treehouse for his kids. Vivona sketched a design and found an experienced carpenter, Walter Reyes, to do the work for $6,000.

Reyes drew plans for the job, pulled the permit and bought most of the materials. Reyes wanted to be paid 35% on the second day of work, 30% on the fourth day of work and 35% when the job was finished. None of this was in writing.

If you read my blog post last month, you know where this case is headed. Last month I described how a Connecticut contractor couldn’t collect the final $8,000 on a roofing job because the written contract was lame. In fact, the agreement was so bad that the contractor had his mechanics lien rights wiped out.

The contract in this treehouse case, Reyes v. Vivona, was worse still — no written contract at all, just an exchange of text messages, several discussions and Vivona’s paper sketches.

Both cases were decided under Connecticut law and at essentially the same time. But the outcome of the two cases is different. This time the contractor won. I’ll explain.

The treehouse job didn’t go exactly as planned. Work started on Monday. Placing support beams between two trees took all day. On Tuesday, Reyes and his crew did most of the framing and flooring. No work was done on Wednesday. On Thursday, Reyes and his crew framed the roof, doors and windows. Friday was the fourth work day. Reyes started framing the second story of the treehouse, including a loft sleeping area. By the afternoon of the fourth day, Reyes believed he had finished 65% of the job but still had not been paid. Reyes asked Vivona for $3,500 on account. Vivona offered to pay only $2,000. After some discussion, they compromised on $3,000. Vivona wrote the check and Reyes agreed to continue work the following day, Saturday.

Later on Friday, Reyes called Vivona, asking for payment at the end of each day for work done that day. That led to a dispute which ended in Vivona ordering Reyes off the site. Reyes returned to the site later with a police escort to pick up his tools. The next day, Vivona stopped payment on the $3,000 check.

At that point, Reyes had nothing for his four days of work. Now, the question. Isn’t that what Connecticut Home Improvement contract law requires? From Tanius v. Villwell Builders we know that Connecticut contractors who do home improvement work without a written agreement aren’t entitled to anything in court – not even a mechanics lien. Reyes filed suit anyhow.

The Court’s Decision

(1) Construction of this treehouse was an improvement to residential property. That meant Reyes had to comply with Connecticut’s Home Improvement Act.

(2) Reyes wasn’t working for wages. He was doing home improvement work without a contracting license.

(3) Reyes didn’t qualify for lien rights for the same reasons that VillWell Builders did not have lien rights – no valid contract.

So, how did Reyes win this case?

If there is no valid contract and if there’s a good faith dispute about what’s owed, Connecticut courts won’t do anything to help a contractor collect. But this case is different. Reyes and Vivona agreed on Friday that $3,000 was due. Vivona wrote the check. The amount due was no longer in dispute. Stopping payment on that check was an act of bad faith. The court knew exactly how to handle that. Reyes got his judgment for $3,000.

You can expect the same treatment in the 32 states that require a written contract for residential work. If the job goes bad, you better have a good contract. If you’re using contracts that don’t comply with the law in your state, have a look at Construction Contract Writer. The trial version is free.